Question

D’Souza Company sold 11,500 units of its product at a price of $77.00 per unit. Total variable cost is $49.40 per unit, consisting of $39.70 in variable production cost and $9.70 in variable selling and administrative cost. Compute the contribution margin for this company.

Answer 1

contribution margin is $317400

Step-by-step explanation:

given data

sold unit = 11500

price = $77.00 per unit

Total variable cost = $49.40 per unit

variable production cost = $39.70

variable selling and administrative cost = $9.70

to find out

contribution margin for this company

solution

we know sale is 11500 unit at @ $77.00 per unit

so total sale price is = 11500 × 77 = $885500 ...............1

total cost of variable production cost for 11500 unit = 11500 × 39.70

total cost of variable production cost = $456550 .................2

and

total variable selling and administrative cost is = 11500 × 9.70

total variable selling and administrative cost = $111550 .....................3

so contribution margin from equation 1, 2 and 3 is

contribution margin = 885500 - ( 456550 + 111550 )

contribution margin is $317400